Pa. auditor general wants to take a whack at firms that negotiate drug benefits for the Medicaid

[TexasTowelie]

Pa. auditor general wants to take a whack at firms that negotiate drug benefits for the Medicaid program


Pennsylvania Auditor General Eugene DePasquale is recommending ways that the state can better manage a layer of middlemen in its Medicaid program — the pharmacy benefit managers (PBMs) who handle billions in taxpayer funds — and whose profits under the program varied widely in 2017, according to a report his office released Tuesday.

Last year, three PBMs “made between $2 million and nearly $40 million,” the report said. They did this using a business practice called spread pricing, in which the companies charge the state a higher amount for a prescription than what they pay pharmacists for the drug. Through the arrangement, the three PBMs earned “average profits between 28 cents and almost $13 per Medicaid prescription filled.”

“This wide disparity in profit per prescription demonstrates the free rein PBMs have been given,” said the report from DePasquale, who launched his review of the companies in June. “The lack of transparency and government oversight have led to haphazard pricing schedules.”

At a news conference Tuesday inside Royer Pharmacy in Lancaster, DePasquale said he would like the state to contract with PBMs directly, so that they are a ‘fiduciary’ of the state, and not a contractor of the insurers that help administer Medicaid.

Read more: http://www2.philly.com/business/pbms-pennsylvania-medicaid-drug-prices-cvs-auditor-general-20181211.html